Commerce Secretary Wilbur Ross sat down with CNBC’s “Squawk Box” to discuss the on-going U.S.-China trade talks, the state of the Chinese economy and the latest news out of Washington.
Secretary Ross also commented on Apple:
I don’t think Apple’s earnings miss had anything to do with the present trade talks. Think about it: There have been no tariffs put on Apple products, so that’s not it… [The trade issue] certainly has hurt the Chinese economy… rate of growth in GDP, heading down. Rate of growth in retail sales, heading down. Rate of growth in capital investment, heading down… I’m neither happy nor guilty, we had expected that this would happen because what is happening is that the movement of foreign companies, including American ones, out of China already began before these tariff discussions… Thin about how little we actually export to them. What this whole trade thing is about is they export several times as much as we export to them. So, what we have at risk is a very small amount, both absolutely and because our economy is bigger than theirs, certainly relatively it’s infinitely smaller…. [China] has a big need to create millions of millions of jobs to hold down social unrest… I think what has changes is that China now understands how dependent they are on us…
I think there’s a very good chance that we will get a reasonable settlement that China can live with, that we can live with and that addresses all of the key issues
Full interview via CNBC:
Direct link to video here.
MacDailyNews Take: As we wrote last August:
The tariffs are not the end game. They are bargaining chips and, due to the trade imbalance, the U.S. has 376 billion more chips with which to play than China ($506B – $130B)… China’s running out of chips already. This initial negotiation phase too shall pass. The end result will be better than the starting point.
I’m cognizant that in both the U.S. and China, there have been cases where everyone hasn’t benefited, where the benefit hasn’t been balanced. My belief is that one plus one equals three. The pie gets larger, working together. — Apple CEO Tim Cook, March 24, 2018
The United States is insisting that all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers & Tariffs or be met with more than Reciprocity by the U.S.A. Trade must be fair and no longer a one way street!
— Donald J. Trump (@realDonaldTrump) June 24, 2018
If you look at our results, our shortfall is over 100% from iPhone and it’s primarily in greater China. And so as we look at what’s going on in China — it’s clear that the economy begins to slow there for the second half. And what I believe to be the case is the trade tensions between the United States and China put additional pressure on their economy… I’ve had obviously many, many discussions [with the Trump administration] over the course of many months to be constructed and to give sort of my perspective on trade and the importance of it to the American economy as well. And I feel like I’m — that I’m being listened to in that respect. And so I’m actually encouraged by what I’ve heard most recently coming from the U.S. and from China and hopefully we’ll see some changes. – Apple CEO Tim Cook, January 2, 2019
At least half of the popular fallacies about economics come from assuming that economic activity is a zero-sum game, in which what is gained by someone is lost by someone else. But transactions would not continue unless both sides gained, whether in international trade, employment, or renting an apartment. — Thomas Sowell, June 14, 2006
Advisor to President Trump: Apple’s sales should pick up when U.S.-China strike trade deal – January 3, 2019